Online Marketing : An approach to Targeting Consumers behavior

Arvind Mahendru, Managing Partner – GroupM Interaction
In a country like India where we are not dominated by a monopolistic market and have new products popping up each day advertising gains a whole new perspective. Today the contemporary market scenario is demarcated by cut throat competition where each competitor tries to get the better of the others in the race. To carve a niche for themselves, one needs to be on their toes and for that knowledge of consumer buying behavior is inevitable.

Moreover the global economic outlook has begun to look bleak and with the rising fuel costs eating into consumer budgets, consumers in all likelihood will look to cut down on frivolous travel- Fallout of which will be less of eating out, fewer drives to malls and other entertainment destinations.

But would that mean consumers will stop eating food from restaurants, stop watching films, stop shopping for clothes and other such items. NO! They will look at new ways to do the same thing, a way in which their fixed fuel budgets are not altered.
They will now look to order food home, look at video rentals as against going to multiplexes (unless the multiplex is within walking distance or very close by), shop online for clothes etc.

It would not be just the consumers who will start to cut corners. Businesses will look to trim expenses and that for sure will include marketing and advertising spends. While I hope online budgets would fare better than less measurable media, we as marketers will need to search for a smart way to make smaller monies go further.

As marketers we need to keep abreast of this change in the consumers’ buying behavior, we need to be present at the points where the consumer wants to be.

Online marketers must use multifaceted programs as a means to reach their consumer. A good program should me made up of several components:

a.)Ad networks
b.)An assortment of high-profile sites for branding purposes
c.)A mix of contextual and keyword based targeting
Each of these components will need to have a different benchmark (clicks, conversions, etc.) that will need to contribute to the overall ROI. The risk however here is that when these programs are laid out in a media grid and budgets are examined by each line item, companies tend to be tempted to slash programs that appear to have a lower ROI and higher costs. If we can successfully optimize and redefine relevance, internet is one of the most cost-effective ways to reach potential customers and boost revenues.

In order for this to work properly and efficiently, a behavioral targeting program will need a foundational program that is powered by contextual or maybe even demographic targeting. This will bring in new customers but score a lower ROI when examined in isolation.

Maintaining these foundational programs, companies will only pay for costly new consumers once and keep them in the message pool. Marketers who don't understand how those tactics support each other and who eliminate the growth element to save short-term money may end up with a program that's crippled, can't scale, and won't show the portfolio ROI they want in the long term. Such people may think they're saving money, but they may actually end up destroying their long-term behavioral targeting goals.

Even if short-term ROI does not look so bad, one must look at the customer pool down the line. If you're not seeding the pool, it may end up getting pretty thin in three to six months.

Companies need to calm down and not panic about the impending recession, think long term and resist the urge to react with knee-jerk budget cuts. Organizationally, this will require people who think about the bigger picture and to work together to understand all the possible impacts both short and long term before deciding a course of budgetary action that could severely affect results in the future, regardless of the economy.

Even though your marketing budgets may get slashed, don't forget your consumers' budgets would have taken a potentially bigger and certainly more personal hit.
There are certain behavioral changes we can expect, including more online shopping to save gas, a pullback on luxury items, substitutions of generic or less expensive brands, a preference for known brands and relationships to reduce risk on spending unless motivated by significant price differentials, and increased response to promotion and coupons.